Pages Navigation Menu
Categories Navigation Menu

The Cost of Ignoring Employee Retention? 150% or More of an Employee’s Salary

The Cost of Ignoring Employee Retention? 150% or More of an Employee’s Salary

As part of the “Cycles of Success: Employee Engagement, Career Development & Talent Management” series (visit, we conducted several interviews with Nicole Trapasso, divisional director of HR and organizational development at CPP, Inc. Over the next few months you’ll see blog posts from these interviews and more on topics related to talent management and the phases of the talent management life cycle. If you’d like to read more about career development from the personal or employee side, you can find the first blog post in the series here:


I think the reason you see the costs of replacing an employee rising is that HR professionals are being more realistic about the amount of company knowledge that is lost when an employee leaves and the ramp-up time it takes to get someone in and productive. When you consider the investment you’re making in a current employee—only to have him or her move on to another employer—and the fact that it can take six months to get someone else in and trained, that takes quite a toll on the organization. In addition, if the work that the employee was doing still must be completed, your remaining staff may become overworked while trying to cover the vacant position.

And if your company has a high level of employee turnover, it could also start to affect your high-performing employees. If they continually see employees leaving, they could start questioning their own commitment to the organization and what keeps them there. (A few ways to combat this are provided in the blog Meaningfulness and Engagement in Your Workforce).

In addition, as cited in a recent article in Forbes (, when employees leave a company, they can usually look forward to a 10%–20% increase in salary. This is another reason that employees may look to other opportunities and another reason employee retention is so important.

If we look at what the investment in our employees really is, that figure of 150% to 200% of salary for mid-level employees (up to 400% for high-level or highly specialized employees) isn’t so surprising. That’s why when we bring people in we want to make sure we have a really good fit up front—the cost of not getting those things right is extremely expensive and can prevent the company over time from being able to achieve its objectives. If it happens frequently, employee turnover becomes a disruptive process. You can’t expect managers to operate at the highest levels when they’re supporting recruitment for a position on their team. Indeed, investing in an employee and then having that employee leave has an emotional impact on all involved.

The bottom line is that it costs less to retain employees than it does to replace them. True, it can feel expensive to invest in retention without a direct line to return, but the cost of losing your best employees to another company is always higher.


Previous blogs on Talent Management:

Managing Your Employees for Long-Term Engagement

Technology and Engagement

Generational Spans in Talent

Today’s Workforce Trends Affecting Tomorrow’s Leaders

Meaningfulness and Engagement in Your Workforce

What is the Talent Management Life Cycle?


Leave a Comment

Your email address will not be published. Required fields are marked *

Your message was successfully sent!

10 + 6 =